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Lyssenko v. International Titanium Powder

May 6, 2008


The opinion of the court was delivered by: Robert W. Gettleman United States District Judge

Judge Robert W. Gettleman


Taras Lyssenko has sued his former employer, International Titanium Powder ("ITP") for breach of contract (Count I), unjust enrichment (Count II), retaliatory discharge (Count III), defamation per se (Count IV), and violation of the Uniform Deceptive Trade Practices Act (the "UDTPA") (Count VI). Plaintiff has also sued ITP's CEO, Stanley Borys, for defamation per se (Count V) and violation of the UDTPA (Count VII). Defendant ITP has moved to dismiss counts II, III, IV, and VI under Fed. R. Civ. P. 12(b)(6), and defendant Borys has moved to dismiss Counts V and VII on the same ground. Borys incorporates by reference ITP's arguments relating to Counts IV and VI, as those counts correspond to the counts against him in his individual capacity.


The facts alleged in the complaint are taken as true for purposes of the instant motion, Bontkowski v. First National Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993). Plaintiff states that he entered into an oral agreement with ITP in 2002, under which he would seek government funding for ITP projects relating to the development of titanium products. Plaintiff alleges that ITP agreed to pay him 5% of the funds received as a result of his efforts. He further asserts that from 2002 to 2004, plaintiff contacted members of Congress and representatives of various governmental agencies in pursuit of funding for ITP, and that, in addition, he engaged in business development activities that were outside the scope of his agreement with ITP, but that he believed would benefit his efforts to raise government funds on behalf of ITP. At some point during this period, ITP gave plaintiff the title Director of Government Relations and Business Development.

In or around February 2004, after ITP received funding from the government, the parties modified their agreement. Plaintiff states that the parties' fundamental obligations remained the same under the modified agreement (i.e., plaintiff would continue to seek government funding on ITP's behalf, and ITP was still obligated to compensate plaintiff in an amount of 5% of all government funding he obtained), but that additional provisions were agreed upon. Specifically, plaintiff claims that under the modified agreement, he would receive "installment payments" in the form of a monthly salary of $9000 as a "pay down" of the ultimate 5% of government funds to which he was entitled under the earlier agreement. In addition, the modified agreement provided that plaintiff would receive health insurance and other employee benefits. Plaintiff does not claim that ITP failed to pay the agreed-upon monthly salary or provide benefits during the period from February 2004 through the termination of his employment in August 2007.

The parties' relationship soured. Plaintiff claims that although he was successful in obtaining funding for ITP from a number of government sources, defendant Borys and others at ITP began to "criticize" him and seek to avoid paying him according to the terms of the parties' original agreement. Plaintiff also states that he overheard a conversation in 2003, in which the Chair of ITP's Board of Directors, Grant Crowley, stated that he planned to fire plaintiff after plaintiff "establishe[d] the foundation" to obtain certain government funding.

Plaintiff was terminated in August of 2007. He claims that his termination was in retaliation for his having questioned, in conversations with defendant Borys and with the Chair of the ITP Board of Directors, the legality of ITP's decision to award construction projects to a friend of ITP's venture capitalist manager without soliciting bids from the public. Finally, plaintiff claims that since his termination, defendant Borys has said to third parties that plaintiff "burned bridges" within the government and insinuated that that was the basis for plaintiff's dismissal.


Legal Standard

The purpose of a motion to dismiss is to test the sufficiency of the complaint, not to rule on its merits. See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When considering a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the court accepts all well-pleaded allegations of the complaint as true and draws all reasonable inferences in the plaintiff's favor. See McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 758 (7th Cir. 2006). The complaint must, nevertheless, plead sufficient facts to suggest plausibly that the plaintiff is entitled to relief. See Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007).

Count II - Unjust Enrichment

The court assumes, as it must, that ITP in fact received a benefit as a result of plaintiff's services, and that plaintiff did not receive "full recompense" for those services. Defendants argue that plaintiff's unjust enrichment claim should be dismissed because it cannot coexist with his breach of contract claim. The court agrees. Plaintiff's argument that he is entitled to plead inconsistent counts in the alternative may be true in the abstract, but it is unavailing here because that is not what plaintiff has done. Rather, he has alleged that ITP has been unjustly enriched as a result of its alleged failure to fulfill its express contractual terms. Plaintiff's reliance on the breach of contract claim to support his claim of unjust enrichment is fatal to the latter claim. See Bucciarelli-Tieger v. Victory Records, Inc., 488 F. Supp. 2d 702, 713 (N.D. Ill. 2007); Team Impressions, Inc. v. Chromas Technologies Canada, Inc., No. 02 C 5325, ...

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